East vs. West

East vs. West

The Russian ruble is a currency that has gotten lots of attention recently in forex news, and for good reason. Over the course of 2018, the ruble has seen a decline of roughly 15% against the US dollar, largely due to political reasons, sanctions imposed on parts of the Russian economy, and strained trade ties between Russia and Western countries. With GDP figures for the third quarter of 2018 coming out on November 13, traders are now asking where the ruble is headed next. To help Exness traders figure out how and when to target profits from the ruble, we asked two forex market experts to give us their take on just that!

 

Open the Exness trading platform and see what the ruble is doing right now.

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Yes, the ruble is going down!

Taking a look at the c chart, you don’t really need to stretch your imagination to see that the ruble is already heading downhill. Overall, the technical picture looks very bearish for the ruble right now, and unless the GDP numbers really surprise the market positively, this currency is definitely not moving higher against the greenback any time soon.

RUBUSD
The RUBUSD actually broke down below the support area at 1.13, defined by the low from back in mid-August.

And the picture doesn’t look much better when it comes to the fundamentals either. Compared with the US economy the Russian economy seems sluggish at best.

Just like other emerging market economies, the Russian economy has struggled over the past year and continues to do so. Don’t forget that forex news posts in September when IMF said that Russia has room for further rate cuts this year. As we all know, lower interest rates are always bad for the value of a currency. Traders following that particular perspective are already prepared to go short on the ruble. Do you agree? Open your exness account, drag across the RUBUSD pair, and watch as the ruble goes to rubble.

 

No, the ruble is undervalued right now!

To truly understand the opportunities in depressed currencies like the Russian ruble, it can be wise to look away from the charts for a little bit. Instead, take a birds-eye view of the fundamentals and the key drivers in the global economy right now. You may be surprised by what you see!

The trend of de-dollarization around the world is just beginning, and the truth is that more and more countries are turning away from the US dollar in transactions they make on the world stage. Unsurprisingly, Russia and China are leading in this effort, but it is also a huge priority for other countries that are suffering under US sanctions.

As you might imagine, the effort to ditch the dollar also manifests itself in another market that appears to have bottomed in mid-August: Gold. As the dollar and gold are pretty much inversely correlated, a rise in the gold price will become a drag on the dollar. And with the dollar losing steam, the RUBUSD will necessarily gain an advantage!

Now, let’s take a look at the chart and see why it might not be as bearish as some people seem to think.

trading ruble 2018
A 4-hour chart of RUBUSD showing a very clear bullish candlestick formation down in the lower right corner.

Such a bullish candlestick formation often indicates that a reversal to the upside can be expected. What makes it even more interesting, however, is that the bullish candlestick coincides with the price hitting the downward red trendline on the chart, which provides at least some short-term support to the market. Two independent forces pushing price in the same direction is referred to as “confluence” in technical analysis, and the truth is that they are among the most reliable signals we can get!

Whether this will be enough this time remains to be seen. But with several technicals suggesting a short-term reversal, and fundamentals suggesting a longer-term reversal, it makes a lot of sense to be bullish on the mighty Russian ruble right now!

 

Final judgment to come

As usual, our two experts are at odds with each other regarding the outlook on the forex market. The only thing we can say for sure is that the forex market is full of uncertainty right now, so don’t be surprised if the Russian ruble does actually turn around and start moving higher against the dollar.

Often, it is not the one who can successfully predict the future who will be the winner in the market, but the one who is best at adapting to the ever-changing market conditions. As the old saying goes, the only thing that is for certain in the market is that the market always changes. Those neverending changes are the source of profit for forex traders, and you too can gain safe and secure access to the markets by signing up for an exness account and opening the award-winning MT4 software platform.

 

Be ready to trade on the next ruble market move.

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This article is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience, or current financial situation. This article is not prepared in accordance with legal requirements promoting independent investment research, and Exness is not subject to any prohibition on dealing before the release of the article. Readers should consider the possibility that they may incur losses. Therefore, Exness is not liable for any losses incurred due to the use of its articles.